Budapest's beautiful West railway station, designed by Gustave Eiffel, has a new neighbour - a vast shopping mall, luxury hotel and multiplex cinema complex, due to open on 12 November.

It's the latest, and most dramatic addition to the city's rapidly changing skyline, a wedding-cake of brick, concrete and glass, with chrome finishings.

On the pavement opposite, across the busy Vaci road, elderly people stand outside a row of small shops - barbers, bakers, and newsagents - watching the building work.

Most local people admit to a sense of awe at the sheer scale of the thing : 2,000 men are employed full time on the project. Work goes on day and night, weekdays and weekends, to finish it by the deadline.

The project though is just one of many. A stunning 25 new shopping malls are under construction in Budapest in the moment.

He's pleased about the investment flowing into his city, and would be loathe to take any steps to discourage it. A liberal politician and former dissident, Mr Demszky is currently engaged in legal proceedings with the conservative government, over his plans to build a fourth metro line under the city. The government says the project is too expensive, and doesn't want to pay.

But Mr Demszky is also engaged in another legal battle. It's the latest in a series of scandals involving the activities of the secret
services - past and present.

Istvan Csurka, leader of the far-right Hungarian Justice and Life Party, which has 12 seats in the Hungarian parliament, recently alleged that Mr Demszky had volunteered to become a police informer in the 1970s. The mayor vehemently denies the allegation, and is threatening to sue.

Battles like these are just one example of Budapest's struggle to find a post-communist identity.

Beneath the surface prosperity of the Hungarian capital, the country seethes with tales of organised crime and corruption, involving senior policemen, and local and national officials. In Budapest, it sometimes feels that the country is only acting out democracy and a free-market economy. Behind the scenes, real power remains in the hands of the very few.

It is exactly 10 years since the Hungarian Social Workers Party - the Communists - dissolved themselves and became the Socialist Party. They won a respectable 12% of the vote in the first free elections, in 1990, then won the 1994 elections comfortably. After narrowly losing power to the conservative Hungarian Civic Party in 1998, they now lead opinion polls ahead of the next elections in 2002.

The current prime minister, 37 year old Viktor Orban, lamented in 1994, 'we let them out of quarantine too soon.'

Like their leaders, the Hungarian public appear at first sight to have taken to parliamentary democracy like fish to water - allowing each government to serve its full four-year term, then choosing a new party to lead them at each of the three elections so far.

But voters say they are against the parties which have disappointed them in government, rather than for the rival parties. There is an impatience and frustration in the air, which sits uneasily with the image of a successful, former Communist country, sailing happily into the European Union.

Istvan Matko, who runs his own PR company from a villa on Rose Hill, a smart residential area overlooking the city, sees some grounds for hope.

"The early 1990s in Hungary were like the 1920s in Chicago' he says - years of 'jungle capitalism' in which those who emerged with most wealth and political influence from the Communist years, seized property and assets," he said.

Now, he believes, the same people want to become good corporate citizens. They have a vested interest in making sure that the laws which they ignored, are now respected. To prevent anyone wresting from them what they acquired. The end result, he believes, however unjust, will be more stability.